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Profit-taking Cuts Dubai Gains; ADX Up

DUBAI - Shares on the Dubai bourse retreated on Tuesday, unable to sustain previous gains as investors booked profits, with Arabtec Holding losing nearly 10 per cent.

The benchmark index of the Dubai Financial Market gave back some of its gains from Monday’s strong rally to end 3.82 per cent lower at 1,589.81.

Dubai shares on Monday posted their biggest one-day gain since November 17 as investors cheered Dubai’s issuance of a $20-billion bond in which half was subscribed by the UAE central bank, dousing fears the emirate may default on its piling debts.

The Abu Dhabi Securities Exchange main index edged up for a third trading day this week to finish 1.74 per cent higher at 2,338.56.

Abu Dhabi-based Emirates Telecommunications Corp. or Etisalat, the country’s biggest phone company, added 7.78 per cent to Dh10.80. The company said late on Monday it will pay a dividend of Dh0.35 a share for the second half and may distribute one bonus share for every 10 held.

“Profit-taking was expected but we did not expect the selling to be this strong,” said Samer Al Jaouni, general manager of Middle East Financial Brokerage Co. in Dubai.

“With fundamentals unchanged, the volatility we have seen today showed the air of uncertainty is still making investors nervous.” The Dubai bourse last year lost 73 per cent while the Abu Dhabi exchange dropped 43 per cent as global stocks were pummelled by the 
worldwide recession.

Arabtec shares plunged 9.74 per cent to Dh1.76, paring some of its gains on Monday when it surged 14.11 per cent.

Index mover Emaar Properties shed 3.22 per cent to Dh2.10.

Al Mal Capital said it is reviewing its rating and price target for Emaar after the property giant’s US unit John Laing filed for bankruptcy protection.

The Dubai Financial Market which jumped 14.81 per cent on Monday, dropped 9.52 per cent to Dh1.33.

Banks also retreated led by the Dubai Islamic Bank and Masreq Bank which shed more than 5 per cent each.

“The underlying fundamentals for the economy remain week for 2009. We believe the market has been increasingly been factoring in the probability of such an action in recent weeks anyway,” said Fahd Iqbal, vice-president for research at EFG-Hermes.

The UAE, along with other economies in the Gulf region are reeling from the impact of the global economic meltdown, further putting pressure on oil prices that could force governments to cut spending.

rocel@khaleejtimes.com